Granholm says Obama committed to Michigan

After signing a bill that spends $876 million in economic stimulus money for state and local roads, Gov. Jennifer Granholm said still more federal aid is needed to help Michigan weather a massive auto restructuring "that is going to get worse before it gets better."

"We don't want to lose more jobs, we want to see an investment in our state, in our communities and in the workers who may have to transition," Granholm told reporters this morning.

"We need to see something from the federal government that addresses our economic hurt, here," she said.

Granholm said President Obama is "committed" to a viable domestic auto industry, the production of a new generation of fuel-efficient cars in Michigan and "helping families and communities that are most affected by this shift in manufacturing jobs."

Ed Montgomery, the Obama administration's point person on the economic impact of manufacturing job loss in the states, will come to Michigan Wednesday where Granholm will lay out where the federal government can help the state survive an economic transition that has already cost some 600,000 jobs since 2000.

Fritz Henderson, the new CEO of General Motors Corp., said Tuesday that still more plant closings are in the works as the company works on a fresh 60-day clock to more aggressively restructure and demonstrate viability.

Bankruptcy for GM and Chrysler LLC should be a "last resort," Granholm said, and that in the next two months, various interests were going to have to take "haircuts" so the two firms can remove the debt load from their balance sheets. She didn't specifically mention the United Auto Workers.

"We've taken a lot of haircuts in Michigan. We've seen a lot of sacrifice," she said.

Granholm also backed efforts in Congress to provide new car buyers with tax credits to purchase more fuel efficient cars.

She and Michigan lawmakers have placed a sizable bet that the cars of the future will be powered all or in part on high-energy batteries, approving the future authorization for more than $500 million in tax credits to promote advanced battery development and manufacturing. GM has been awarded tax incentives to build the new Chevy Volt in Michigan.

Obama's auto task force concluded that the electric-powered Volt may not be commercially viable given it's steep price tag. Granholm said tax credits would be needed to bring the cost of the Volt down to spur consumer demand.

Granholm said the Volt is "going to be expensive, like every early technology entree into the market is expensive. When the (home) computer started, that was expensive."
"So the question is how do you get those first vehicles to a price that people can afford," she said. "The federal government can be helpful on that, too."

Senate Majority Leaders Michael Bishop, R-Rochester, said the Obama administrations actions on the auto industry, including forcing the ouster of Rick Wagoner as GM CEO, was "more of the same big government solution that has failed to produce any positive results for our auto industry or our economy as a whole.

Chrysler's Auburn Hills headquarters is in Bishop's district and he said "the autos would be wise to rethink their decision to do business" with the Obama administration.